Industry Analysis

Essay by aamir9College, UndergraduateB, April 2010

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Industry Analysis an overview of an industry breaking down the industry from the beginning to the decline if that is the faith of that particular industry. I will breakdown and explain the five phases of the industry life cycle which shows the tradition path a product takes from its conception to its decline or revamping. Explain the dividend policy as it relates to the five stages of the industry life cycle. Discussing industry analysis could not be possible without including the effects that government regulations can possess on an industry. Within the paper will also be discussed the various economic structures of industry and how the assist an analysis in deciding which structure the industry falls under which could have a direct effect on investment opportunities and how profitable they are. Along with this will also be discussed how government regulations effect industries and to what extent it can effect dividend pay outs.

Also we will take a closer look at the performance of different companies within a particular industry to see how they compare with each other. Lastly will be discussed the concept of rotational investing and how investors shift among industries during the various phases of the business life cycle.

The phases of the Industry Life cycle are similar to that of the human lifecycles. It begins with the Development Stage and end with the Decline Stage. In between the two you have the Growth, Expansion, and Maturity Stages. The development stage of the life cycle is defined as when a company gets its start in business with a new idea or product. It is usually funded by the individuals that are producing the product or service. After the company has proven itself is usually when other outside funding sources jump...